City reveals details of five proposals to redevelop WTC building

5 in running for redevelopment

Advocate staff photo by JOHN McCUSKER -- World Trade Center New Orleans.

A city selection committee will begin negotiating Friday with five developers vying to take over the vacant former World Trade Center office tower at the foot of Canal Street and turn it into a mixed-use hotel and residential complex.

The committee will have to decide which of the plans — submitted in response to a request for proposals and all of which propose some combination of hotel and residences — would provide the best value to the city. The five respondents will make formal presentations to the selection committee on Feb. 27.

The riverfront property at 2 Canal St. is widely considered to be one of the most valuable sites in New Orleans, but the city has struggled for years to find someone to redevelop the 33-story 1960s building, with repeated efforts coming to naught. The last attempt failed last year when the city could not come to an agreement with a developer on the building’s value.

All five projects are based on a 99-year lease agreement with the city and include a promise to meet or exceed the city’s requirement for at least 35 percent participation from disadvantaged business enterprises.

Four Seasons proposal

The proposal from Carpenter & Co. Inc. and Woodward Interests LLC would convert the building into the Four Seasons New Orleans, a 350-room hotel with 76 hotel-serviced residences. The building would be flanked by two new low-rise structures, one containing a restaurant and the other a parking garage.

The redeveloped property also would include a two-story rooftop cupola, featuring a public observation deck; a “cultural attraction” in an adjoining building; and a “new urban park” to be built at Canal Street and Convention Center Boulevard.

The $360 million project would be funded by $126 million in equity and $234 million in debt.

The developers have proposed paying the city $2 million per year in rent for the first five years of operation; $2.25 million annually in years six through 10; and $2.5 million from years 11 through 15. After the 15th year, the rent payment would be $2.5 million times the percentage increase in the consumer price index for the preceding five years, with some restrictions. The developers also would give the city a share in the hotel’s profits and an additional $7.5 million over nine years if it were to receive federal and state historic tax credits for the project.

Hotel Alessandra proposal

Two Canal Street Investors Inc. has proposed a $238 million, 318-room Hotel Alessandra and 240 luxury apartments called the Alessandra Residences. The hotel would include restaurants, a ballroom and a wine bar. A jazz lounge would be headlined by Kermit Ruffins on the building’s top floor.

The proposal also contemplates making improvements to the Spanish Plaza water fountain and constructing a $500,000 “wine laboratory” at the Lester E. Kabacoff School of Hotel, Restaurant and Tourism at the University of New Orleans.

The proposal calls for the World Trade Center organization once again to have its offices in the building.

The developers said they would give the city $23 million, the appraised value of the building, upon execution of a lease and then would make annual payments of $2.5 million adjusted over time by the consumer price index or 6 percent, whichever is greater.

Godfrey Hotel proposal

Oxford Capital Group LLC has said it would remake the building into a 516-room Godfrey Hotel plus 166 one- and two-bedroom apartments and six penthouse apartments. The hotel would include meeting space, a restaurant, a jazz club and rotating lounge and event space on the top floor.

A separate five-story building would be built to provide parking; it also would include a ballroom, a rooftop entertainment venue with a pool and private event spaces.

The northwest corner of the existing building would be turned into a “pedestrian plaza.”

The $257 million project would be funded with $128 million in debt, $75 million in equity and $53 million in tax credits.

The developer has offered a base rent of $1.85 million that would increase each year based on the consumer price index. Additionally, Oxford said it would give the city 3 percent of its annual revenue over $45 million.

Crescent Hotel proposal

A proposal from local developer HRI Properties calls for the building to become the Crescent Hotel & Crescent Tower at the World Trade Center, a 309-room hotel with 261 residential units. The hotel would be operated by the Luxury Collection of Starwood Hotels & Resorts. Starwood operates the Sheraton and W hotel brands.

The proposed development also calls for a restaurant run by local restaurateur Dickie Brennan in the lobby and a revolving bar on the top floor. An interactive visitor attraction called the New Orleans Experience and operated by Mercedes-Benz Superdome manager SMG would occupy the building’s 31st floor.

The proposed $266 million project includes $40 million in state historic tax credits, $44 million in federal historic tax credits, $9 million in new market tax credits, $48 million in investor equity and a $125 million construction loan.

HRI says the tax credits are “vital to the financial viability” of the project.

HRI has proposed making a $10 million upfront lease payment to the city as well as a base rent payment of $1.75 million a year. The city also would receive rent from the tourist attraction and a share of the attraction’s gross revenue.

Conrad Hotel proposal

The final proposal, from 2 Canal Redevelopment LLC in partnership with Hilton Worldwide, calls for transforming the building into the Conrad New Orleans Hotel and Residences by Hilton Worldwide. The project would include 307 hotel guest rooms, 120 residences, a restaurant, meeting space, a spa and a public rooftop observatory on the top floor. A new annex building would contain parking space for 127 vehicles, two pools and a pool club.

The proposal also contemplates the larger redevelopment of nearby riverfront property, including connecting both the Morial Convention Center and the former WTC building to the Hilton New Orleans Riverside hotel, connecting the Outlet Collection at Riverwalk to Convention Center Boulevard and making “significant aesthetic and practical enhancement” to Poydras Street.

The development partnership behind the plan is led by local developers Joe Jaeger, Darryl Berger and Roger Ogden plus Xavier University President Norman Francis.

The $292 million project would be funded through $23.8 million in equity from the four local partners and $10 million in equity from Hilton; $32.7 million in state historic tax credits; $37.2 million in federal historic tax credits; and a $188 million construction loan.

The developers propose making a $50 million initial payment to the city plus $1.5 million annual rent.

On top of that, the 2 Canal team is promising to donate $1 million to Xavier University and $250,000 to the mayor’s NOLA for Life Initiative.

The committee’s first review, before the latest round of submissions, ranked Carpenter & Co. Inc. and Woodward Interests LLC first among the respondents. It was followed, in order, by Two Canal Street, Oxford Capital LLC, HRI Properties and 2 Canal Development LLC.